Two Types of Reporters
The taxonomy creates disclosure obligations for two groups:
Non-Financial Companies
Companies subject to CSRD (Corporate Sustainability Reporting Directive). This includes:
- Large EU companies meeting 2 of 3 criteria: 250+ employees, EUR 50M+ turnover, EUR 25M+ balance sheet
- Listed SMEs (with simplified requirements, phased in from 2026)
- Certain non-EU companies with substantial EU operations (EUR 150M+ net turnover in the EU)
These companies disclose what proportion of their activities are taxonomy-eligible and taxonomy-aligned.
Financial Institutions
Banks, asset managers, insurance companies, and investment firms subject to CSRD. They have their own tailored KPIs that measure the taxonomy alignment of their portfolios and lending books.
Additionally, financial market participants offering investment products must disclose taxonomy information under SFDR (Sustainable Finance Disclosure Regulation) in their product documentation.
What Non-Financial Companies Disclose
Three KPIs, each expressed as a percentage:
| KPI | Numerator | Denominator |
|---|---|---|
| Turnover | Revenue from taxonomy-aligned activities | Total net turnover |
| CapEx | Capital expenditure on taxonomy-aligned assets, or CapEx plans to become aligned | Total capital expenditure |
| OpEx | Operating expenditure on taxonomy-aligned activities (R&D, maintenance, renovation, short-term leases) | Total relevant operating expenditure |
The CapEx KPI is particularly important because it captures transition plans. Even if a company's current turnover is not taxonomy-aligned, its CapEx can show it is investing to become aligned - for example, building a new low-carbon production line. This forward-looking element is deliberate.
What Financial Institutions Disclose
| Institution Type | Key KPI |
|---|---|
| Banks | Green Asset Ratio (GAR) - proportion of taxonomy-aligned exposures in covered assets |
| Asset Managers | Proportion of taxonomy-aligned investments in assets under management |
| Insurance Companies | Taxonomy-aligned investment ratio + underwriting KPIs |
Financial institutions depend on their portfolio companies reporting taxonomy data first. This is why the non-financial company disclosures feed directly into the financial sector's KPIs.
Think of it as a supply chain of data. A cement manufacturer reports that 30% of its turnover is taxonomy-aligned. The bank that lent money to the cement manufacturer uses that 30% to calculate the taxonomy-aligned portion of its own loan book. Without the manufacturer's data, the bank cannot compute its Green Asset Ratio.
Phased Disclosure
Reporting obligations were phased in over time:
| Reporting Year | What Was Required |
|---|---|
| FY 2021 | Taxonomy eligibility only (climate objectives) |
| FY 2022 | Taxonomy eligibility only (climate objectives) |
| FY 2023 | Full eligibility + alignment (all 6 objectives) |
| FY 2024 onwards | Full eligibility + alignment (all 6 objectives) |
Key Takeaways
- 1Non-financial companies disclose three KPIs: what proportion of their turnover, CapEx, and OpEx is taxonomy-aligned
- 2Financial institutions disclose portfolio-level alignment through tailored KPIs like the Green Asset Ratio (banks)
- 3The CapEx KPI captures transition plans - even companies with low current alignment can show they are investing to get there
- 4Financial institution disclosures depend on their portfolio companies reporting taxonomy data first - it is a data supply chain